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Business News/ Market / Stock-market-news/  Global gold prices edge up, all eyes on Fed minutes
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Global gold prices edge up, all eyes on Fed minutes

Gold prices bounce back ahead of the release of minutes of the US Federal Reserve's previous meeting that could offer clues on the pace of the central bank's interest rate hikes

Spot gold was up 0.2% at $1,279.67 per ounce by 10.09am. Photo: ReutersPremium
Spot gold was up 0.2% at $1,279.67 per ounce by 10.09am. Photo: Reuters

Gold prices bounced back on Tuesday ahead of the release of minutes of the US Federal Reserve’s previous meeting that could offer clues on the pace of the central bank’s interest rate hikes. The minutes of the Fed’s last policy meeting, when it kept interest rates unchanged, will be released on Wednesday.

Spot gold was up 0.2% at $1,279.67 per ounce by 10.09am. The metal fell about 1.4% on Monday in its biggest one-day%age drop since 11 September. US gold futures for December delivery gained 0.3% to $1,279.30.

“Given the fact that the December rate hike is almost a done deal, market watchers will look more closely at what is the Fed rhetoric for post December," OCBC analyst Barnabas Gan said.

Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.

Fed chair Janet Yellen said on Monday she would resign her seat on the Fed’s board of governors once Jerome Powell is confirmed and sworn in to replace her as head of the US central bank.

“The fact that Yellen has now confirmed to leave is adding a little bit of volatility as traders adjust their positions while they make sense of the implications of the incoming new Fed chairman Jerome Powell in terms of interest rate direction," said Loh Mun Chun, director, private wealth at GoldSilver Central in Singapore.

Traders were also keeping an eye on the geopolitical front after US President Donald Trump put North Korea back on a list of state sponsors of terrorism on Monday.

“It is very hard to predict as to what Trump is going to do... We are waiting to see how North Korea reacts and whether it escalates global tensions," OCBC’s Gan said.

Spot gold may break a support at $1,274 per ounce, and fall towards 6 October low of $1,260.16, according to Reuters technical analyst Wang Tao.

In other markets, the dollar gave back some of its gains in Asian trading but remained within sight of a one-week high against a basket of currencies as German political uncertainty continued to pressure the euro.

Silver rose 0.3% to $16.96 an ounce and platinum was up 0.6% to $928.70. Palladium gained 0.2% to $990.60 an ounce. On Monday, silver fell 2.3%, its biggest%age fall since 26 September, while platinum lost nearly 3%, marking its worst day since early May. Reuters

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Updated: 21 Nov 2017, 11:22 AM IST
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